Defence

Feature

The year 2020, with 2020 vision Australia’s strategic outlook—a longer term view

Mr Peter Varghese, Director-General of the Office of National Assessments, recently spoke to the Australian Strategic Policy Institute in Canberra about the strategic outlook for Australia over the next 10–15 years.

Looking forward 15 years, it is sobering to realise how unpredictable strategic developments can be. The tectonic plates of strategic relations usually move slowly, but not always. If this gathering had been held in 1986, who would have anticipated the sudden end of the Cold War, the collapse of the Soviet Union, the Asian financial crisis or 9/11?

Australia does not face any direct threat to its territorial integrity. Our continental geography and maritime approaches give us great strategic depth. We have deeply rooted political stability and a strong economy.

Yet the historical memory of Australians is one of strategic anxiety—an angst that has been shaped by many elements: a small population on a large continent, a historical sense of isolation from cultural roots, a pattern of instability in near regions and a visceral recognition that things can sometimes change quickly for the worse.

Geography, culture and history— including our wartime experience from the Sudan campaign of 1885 to Iraq today— have combined to make Australians acutely sensitive to the fact that sunny strategic skies can quickly cloud over. In strategic analysis, national psychology can be as important a vector as national capability.

Australia has long seen its own security tied to broader regional and global stability. Indeed, of the many instances where Australia has participated in military conflict, only once—in 1942—was it in direct defence of Australian territory. In all other cases it reflected either a defence of principle or a calculation that Australia should help defeat a threat before the threat defeated Australia.

Against this background let me offer some observations about the strategic outlook, including the relationship between strategic reach and economic strength. Also let me acknowledge at the outset the dynamic tension between continuity and change; this tension lies at the heart of all long-term projections. In the next 10–15 years, foundations of the global order—such as the centrality of states and US primacy—will remain familiar, even while they begin to alter.

Globalisation

Among the most significant economic trends with strategic implications over the next 15 years is the continuation of globalisation, a shuffling global hierarchy of economic weight with China and India rising, and competition for energy.

States are not the engines of globalisation but they feel its impact. With livelihoods that permeate borders, globally integrated states get more averse to interstate war. I am not claiming globalisation will abolish war; it will not.

One only has to look at that earlier period of global connectedness—up to 1914—to see that globalisation can end in strategic tears. But globalisation does raise the cost of war and thus can act as a deterrent of sorts.

Terrorism

Terrorism will stay a destabilising force globally for at least a decade, and possibly a generation—a danger to Australian and allied nationals, a challenge to the authority of many governments, and a disruption to the patterns of trust and openness globalised economies need.

Al-Qa’ida and its fellow travellers, especially in South-East Asia, will keep seeing Australia as a target. Elimination of Al-Qa’ida’s operational capability—much eroded—would not cripple the global terrorist threat. Such terrorism will keep morphing and decentralising with a continuing flow of recruits and with autonomous cells looking to Al-Qa’ida more for inspiration than for orders and capability. Isolating terrorists politically, thus denying them future followers, will be the work of a generation or more.

Yet Islamist terrorism has in-built limits as a strategic threat to Australia. It has no scope to endanger the existence of, or take territory from, the Australian state. Nor will terrorism threaten Australia’s fundamental freedom of action to the extent that might, for example, coercion by an economically or militarily powerful state.

The big players

In the world to 2020, a few powerful states, especially the United States, will largely shape the strategic landscape. Indeed, as the century moves on, we face the rise of mega-states—giants unprecedented in their economic and strategic weight, but also in the scale and complexity of their potential domestic problems.

Other than the United States—which will stay the superpower—the big powers that will most shape Australia’s strategic environment in the decades ahead are China and Japan, with India making a growing impact.

Barring unlikely major setbacks, China by 2020 will have global strategic influence and the strongest Asian military. It should stand—with the United States and Japan—among the largest economies by any measure. China has an advantage and a shackle earlier rising powers lacked: its rivals have deep stakes in its economic success and it can’t afford to disrupt the world economic system. Foremost, it needs stable conditions for continued development.

China has other priorities too. It will stay determined to stop Taiwanese independence. It expects to become the leading Asian power. Its relationship with the United States will contain elements of both engagement and competition. All the while, China will be at pains to be seen as a friendly power in its region. None of this will be simple, not least given Beijing’s need to square strategic calculations with rising public expectations, including nationalist sentiment. And plenty of commentators remind us that China’s economic trajectory is not guaranteed.

India, meanwhile, is likely to go far in translating economic growth into greater strategic weight. Like China, it is focused on fostering development while seeking recognition as a power with global interests. It also seeks defence capabilities commensurate with its widening interests. India won’t want its global aspirations hostage to old tensions with Pakistan. It will want a deeper partnership with the United States. In its ties with China, India will try to reconcile burgeoning economic relations with elements of competition, including over energy.

Japan’s economic weight will stay great in global terms, despite an ageing and declining population. Tokyo will keep moving carefully to a more active security posture, within the US alliance and multilateral coalitions. Still, Japan faces a challenging time of keeping its level of influence in Asia as China continues to rise. Japan will keep a watchful eye on China’s rise, and will remain determined to keep US engagement close.

Major power dynamics

Cooperation among major powers is at an historic high—not surprising, given globalisation and transnational threats. But these powers won’t manage their affairs in sustained concert. Their values and cultures differ. Their interests, though sometimes congruent, are far from unified; that would take a shock more global than 9/11 to change. And we haven’t yet seen how they will come to terms with the shake-up in their economic, demographic and military hierarchy, which has far to go.

The United States will stay in a league of its own to 2020 and well beyond. Washington’s global leadership will be sustained by its global interests and by the persistent terrorist threat. In the decades ahead, its lead over other powers is likely to shrink noticeably in economic weight and soft power, but generally not in technology or warfare. And we can expect others to probe the limits of US will and strength, and what they might see as the tensions between its democratic values and its hard strategic equities.

A lasting impact of 9/11 and Iraq will be the way in which these events influence US choices, including choices about resort to force, force structure and alliances. The US defence budget will have to balance the divergent priorities of land forces, including for irregular combat and powerful maritime capabilities.

The United States is set to retain its strong engagement and strategic presence in East Asia. As it comes to rely less on permanent bases, strategic partnerships could become even more useful than some formal alliances. Still, the US alliances with Japan and Australia will continue to anchor Washington’s East Asia strategy.

Relations among the United States, China and Japan are entering unmapped territory.

Never have China and Japan been so strong at the same time. In China, the United States has a vital stake in a rising power’s growth. Japan–US defence ties are closer than ever. All three are grappling with these new realities.

Differences between Japan and China are unlikely to vanish. Differences over history make it harder to manage rivalry over maritime boundaries, energy, or leading regional cooperation.

The North Asian powers will steer an unsteady course of expanding economic ties coupled with strategic wariness. Where they deepen regional cooperation, as in the growth of East Asian diplomatic and financial architecture, it will be partly a contest for influence over these institutions.

The crucial relationship, in East Asia and globally, will be between the United States and China, and will likely stay a delicate mix of engagement and competition. Both will find the threads of competition, cooperation and economic co-dependence hard to weave into consistent policy. A major upset in economic relations which caused increased protectionism could hasten strategic competition.

Over Taiwan, US–China relations carry the only foreseeable risk—currently low—of war between major powers. Both powers will try very hard to avoid such a strategic, economic and humanitarian disaster.

A high-intensity war in Korea is a very small likelihood. But other worrisome scenarios are more likely. Though the North Korean regime has proven surprisingly resilient, we can’t rule out its collapse—a possibility that would unpredictably change North Asia’s strategic equilibrium. There would be pressure for an international stabilisation effort. The turmoil of Korean reunification would be a critical test for US–China relations. Still, the impacts of a discontinuity on the Korean Peninsula would be less profound globally than those of a US–China war over Taiwan.

Strategic shock

The timing of shocks is by definition unpredictable, their cascading effects hard to gauge. The range of wild cards is wide. Some are already imaginable, such as regime change in North Korea, extremists gaining power in a Muslim state, or a convergence of terrorism and weapons of mass destruction. Other possibilities are currently harder to imagine, including the ways in which multiple shocks might interact. And some surprises could erupt for reasons far removed from international politics.

Fast environmental degradation and natural disasters, along with pandemics and economic crises, are possible systemic shocks that military capabilities can’t do much to prevent. More new viruses may emerge. With changes in the flu virus, and in the human and animal populations it can infect, the chance of another flu pandemic on the scale of 1918 is real. The economic, social, political and security impacts would be very large.

I’ve ranged far today, but this strategic survey has not been exhaustive. To offer much value, strategic assessments can’t simply be undifferentiated lists of everything that might go wrong. They need to convey a sense of salience, likelihood and consequence, to identify which contingencies might matter the most, and to define their probable contours.

Even so, the list of issues affecting Australia’s security in the years ahead is long, and will keep growing. Looking back, it’s clear that new strategic problems advance faster than old ones retreat. In a complex and interdependent world, the new issues do not replace the old—they join them on a more crowded horizon. So I don’t envy the task of the analysts who will sit down in 2020 to chart Australia’s strategic environment to 2040, but I’m sure their product will be much in demand.

Reprinted with permission. Compiled by Katharina Chase.

[ top of page ]